Gaming Analysts Discuss Potential Issues with Possible Amaya/Will Hill Merger

Amaya Gaming

After yesterday’s announcement that William Hill and Amaya Gaming are discussing a merger, gaming analysts have come forward with comments, with many feeling that the legal battles of Amaya Gaming in North America may be an issue for Will Hill if the merger were to take place.

According to several media reports, including one via iGamingBusiness, investors are concerned by the legal battle involving Amaya Gaming and the state of Kentucky. A fine of $870 million was issued to Amaya due to violations that were alleged to have taken place in Kentucky in regards to the state’s anti-gambling laws. The company is currently appealing the fine and disputes any liability in the case.

Amaya is also facing issues in Canada with the former Chief Executive and founder of the company, David Baazov, being under investigation for insider trading. Baazov allegedly took part in insider trading when the company purchased PokerStars and Full Tilt.

Numis analysts commented that the investigation involving Baazov and insider trading should not impact Amaya but the damages ruling in Kentucky against the company could be material in the merger. The analysts also think that the poker market has matured and growth is at its lowest opportunity. The high level of debt within Amaya is also a concern. The company has around £1.75 billion in debt.

According to iGaming Business, another source in the market stated that the deal between the two companies makes sense. Since the industry is consolidating, the option is advantageous. The merger would provide a nice mix between land based stores and digital businesses plus geographical locations across the globe.

It may be that William Hill comes to the determination that there are too many uncertainties surrounding Amaya for a deal to be made. Also to consider is the combined debt of both companies. According to reports, the combined debt would be 3.5 times the potential earnings capability with the merger.

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